9-1101.   General powers; maximum interest rates ondeposit accounts; investments.Any bank hereby is authorized to exercise by its board of directors orduly authorized officers or agents, subject to law, all such powers,including incidental powers, as shall be necessary to carry on the businessof banking, and:

      (1)   To receive deposits and to pay interest thereon atrates which need not be uniform. The state bank commissioner, with approvalof the state banking board, may by regulations of general application fixmaximum rates of interest to be paid on deposit accounts other thanaccounts for public moneys;

      (2)   to buy and sell exchange, gold, silver, foreign coin, bullion,commercial paper, bills of exchange, notes and bonds;

      (3)   to buy and sell bonds, securities, or other evidences ofindebtedness of the United States of America or those fully guaranteed,directly or indirectly, by it, and general obligation bonds of the state ofKansas or any municipality or quasi-municipality thereof, and of otherstates, and of municipalities or quasi-municipalities in other states ofthe United States of America. No bank shall invest an amount in excess of15% of its capital stock paid in and unimpaired and theunimpaired surplus fund of such bank in bonds, securities orother evidences of indebtedness of any municipality or quasi-municipalityof any other state or states of the United States of America: (a) If andwhen the direct and overlapping indebtedness of such municipality orquasi-municipality is in excess of 10% of its assessedvaluation, excluding therefrom all valuations on intangibles and homesteadexemption valuation; (b) or if any bond, security, or evidence ofindebtedness of any such municipality or quasi-municipality has been indefault in the payment of principal or interest within 10 years priorto the time that any bank acquires any such bonds, security or evidence ofindebtedness;

      (4)   to make all types of loans, including loans on real estate, subjectto the loan limitations contained in this act. Every real estate loan shallbe secured by a mortgage or other instrument constituting a lien, or thefull equivalent thereof, upon the real estate securing the loan, accordingto any lawful or well recognized practice, which is best suited to thetransaction. The mortgage may secure future advances. The lien of suchmortgage shall attach upon its execution and have priority from time ofrecording as to all advances made thereunder until such mortgage isreleased of record. The lien of such mortgage shall not exceed at any onetime the maximum amount stated in the mortgage;

      (5)   to discount and negotiate bills of exchange, negotiable notes andnotes not negotiable;

      (6)   to buy and sell investment securities which are evidences ofindebtedness. The buying and selling of investment securities shall belimited to buying and selling without recourse marketable obligationsevidencing indebtedness of any person, copartnership, association,corporation, or state or federal agency, including revenue bonds issuedpursuant to K.S.A. 76-6a15, and amendments thereto, or the state armory boardin the form of bonds, notes or debentures or both, commonly known as investmentsecurities, under such further definition of the term "investmentsecurities" as prescribed by the board, but the total amount of suchinvestment securities of any one obligor or maker held by such bank shallat no time exceed 25% of the capital stock paid in andunimpaired and the unimpaired surplus fund of such bank except that thislimit shall not apply to obligations of theUnited States government or any agency thereof. If the obligor is a stateagency including any agency issuing revenue bonds pursuant to K.S.A.76-6a15, and amendments thereto, or the state armory board, the total amountof such investment securities shall at no time exceed 25% of the capitalstock paid in and unimpaired and the unimpaired surplusfund of such bank;

      (7)   to subscribe to, buy and own such stock of the federal nationalmortgage association as required by title 3, section 303 of the federal actknown as the national housing act as amended by section 201 of public lawNo. 560, of the United States (68 Stat. 613-615), known as the housing actof 1954, or amendments thereto;

      (8)   to subscribe to, buy and own stock in one or more smallbusiness investment companies in Kansas as otherwise authorized by federallaw, except that in no event shall any bank acquire shares in any smallbusiness investment company if, upon the making of that acquisition theaggregate amount of shares in small business investment companies then held bythe bank would exceed 5% of its capital andsurplus. Nothing in this act contained shall prohibit any bank from holdingand disposing of such real estate and other property as it may acquire inthe collection of its assets;

      (9)   to subscribe to, buy and own stock in any agricultural creditcorporation or livestock loan company, or its affiliate, organized pursuantto the provisions of the laws of the United States providing for theinformation and operation of agricultural credit corporations and livestockloan companies, in an amount not exceeding either the undivided profitsor 10% of the capital stock and surplus and undivided profitsfrom such bank, whichever is greater;

      (10)   to subscribe to, buy and own stock in minbanc capital corporation,a company formed for the purpose of providing capital to minority-ownedbanks. No bank's investment in such stock shall exceed 2% ofits capital and surplus;

      (11)   to buy, hold, and sell any type of investment securities notenumerated in this section with approval of the commissioner and upon suchconditions and under such regulations as are prescribed by the statebanking board;

      (12)   to act as escrow agent;

      (13)   to subscribe to, acquire, hold and dispose of stock of acorporation having as its purpose theacquisition, holding and disposition of loans secured by real estate mortgages,and to acquire, hold and dispose of the debentures and capital notes ofsuch corporation. No bank's investment in such stock, debentures and capitalnotes shall exceed 2% of its capital stock, surplus and undivided profitsand such investment shall be carried on the books of the bank as directedby the commissioner;

      (14)   to purchase and sell securities and stock without recoursesolely upon the order, and for the account, of customers;

      (15)   to subscribe to, acquire, hold and dispose of any class of stock,debentures and capital notes of MABSCO agricultural services, inc. or anysimilar corporation having as its purpose the acquisition, holding anddisposition of agricultural loans originated by Kansas banks. No bank'sinvestment in such stock, debentures and capital notes shall exceed 2% of itscapital stock, surplus and undivided profits. Such investment shall be carriedon the books of the bank as directed by the commissioner;

      (16)   to buy, hold and sell mortgages, stock, obligationsand other securitieswhich are issued or guaranteed by the federal home loan mortgage corporationunder sections 305 and 306 of the federal act known as the federal homeloan mortgage corporation act (P.L. 91-351);

      (17)   to buy, hold and sell obligations or other instruments or securities,including stock, issued or guaranteed by the student loan marketing associationcreated by (P.L. 92-318) of the United States;

      (18)   to engage in financial future contractson United States government and agency securitiessubject to such rules and regulations as the state bank commissioner mayprescribe pursuant to K.S.A. 9-1713, and amendments thereto, to promotesafe and sound banking practices;

      (19)   to subscribe to, buy and own stock in a state or federallychartered bankers' bank ora one bank holding company which owns or controls such a bankers' bank, exceptno bank's investment in such stock shall exceed 10% of its capital stock,surplus and undivided profits;

      (20)   subject to such rules and regulations as the state bank commissionermay adopt pursuant to K.S.A. 9-1713, and amendments thereto, to promotesafe and sound banking practices, upon recorded prior approval by the boardof directors of the initial investment in a specific company and pursuantto an investment policy approved by the board of directors which specificallyprovides for such investments to buy, hold and sell shares of an open-endinvestment company registered with the federal securities and exchangecommissionunder the federal investment company act of 1940 and the federal securitiesact of 1933 and of a privately offered company sponsored by an affiliatedcommercial bank, the shares of which are purchased and sold at par and theassets of which consist solely of securities which may be purchased by thebank for its own account. Such shares may be purchased without limit if theassets of the company consist solely of and are limited to obligations thatare eligible for purchase by the bank without limit. If the assets of thecompany include securities which may be purchased by the bank subject tolimitation, such shares may be purchased subject to the limitationapplicable to purchase by the bank of such securities;

      (21)   subject to the prior approval of the state bankcommissioner and subject to such rules and regulations as areadopted by the state bank commissioner pursuant to K.S.A. 9-1713, andamendments thereto, to promote safe and sound banking practices, a bank mayestablish a subsidiary which engages in the following securities activities:(a) selling or distributing stocks,bonds, debentures, notes, mutual funds and othersecurities, (b) issuing and underwriting municipal bonds, (c) organizing,sponsoring and operating mutual funds, (d) actingas a securities broker-dealer;

      (22)   to subscribe to, acquire, hold and dispose of stock of anyclass of the federal agricultural mortgage corporation, a corporation having asits purpose the acquisition, holding and disposition of loans secured byagricultural real estate mortgages. No bank's investment in suchcorporation shall exceed 5% of its capital stock, surplus and undividedprofits and such investment shall be carried on the books of the bank asdirected by the commissioner;

      (23)   to subscribe to, buy and own stock in an insurance companyincorporated prior to 1910, under the laws of Kansas, with corporateheadquarters in this state, which only provides insurance to financialinstitutions. The investment in such stock shall not exceed 2% of the bank'scapital stock, surplus and undivided profits;

      (24)   to purchase and hold an interest in life insurance policies on thelife of its executive officers and directors, and to purchase life insurancepolicies for the sole purpose of providing employee deferred compensation andbenefit plans subject tothe limitations listed herein. If the bank has the authority to direct theinvestments of the cash surrender value of the policy, those investments shallbe limited solely to assets which may be directly purchased by the bank for itsown account. The limitations set forth in paragraphs (a) and (b) of thissubsection do notapply to any such life insurance policies in place before July 1, 1993.Funding for the payment of employeecompensation and benefit plans as well as the benefits derived may be made orsplit in a joint manner betweenthe bank, employee or bank holding company as in "split dollar" or otherinsurance plans:

      (a)   Life insurance purchased and held on the life of executive officersand directors are subject to the following limitations:

      (i)   The cash surrender value of any life insurance policy on an executiveofficer or director underwritten by any one life insurance company cannot atany time exceed 15% of the bank's capital stock, surplus, undivided profits,loan loss reserve, capital notes and debentures and reserve for contingency,unless the bank has obtained the prior approval of the state bankcommissioner;

      (ii)   the cash surrender value of life insurance policies on executiveofficers or directors, in the aggregate from all companies, cannot at any timeexceed 25% of the bank's capital stock,surplus, undivided profits, loan loss reserve, capital notes and debentures andreserve for contingency, unless the bank has obtained the prior approval of thestate bank commissioner;

      (iii)   the authority to hold life insurance on any executive officer ceasesif the executive officer is no longer employed by the bank or no longer meetsthe definition of an executive officer;

      (iv)   the authority to hold life insurance on a director ceases when thatdirector is no longer a member of the board of directors;

      (v)   the bank's board of directors must approve and document the purchaseof any life insurance, including the reasonableness of such purchase; and

      (vi)   except as part of a reasonable compensation or benefit plan, a bank isnot authorized to purchase life insurance as an estate management device forthe benefit of officers, directors or employees who are also controllingshareholders of the bank.

      (b)   Life insurance purchased for the sole purpose of providing deferredcompensation and benefitplans are subject to the following limitations:

      (i)   The bank may purchase individual or group policies for the solepurpose of providingdeferred compensation agreements entered into with its officers andemployees;

      (ii)   the bank may purchase policies on directors to fund a deferreddirectors fees program;

      (iii)   the board of directors must approve and document such deferred plansincluding the reasonableness of the plans;

      (iv)   the bank is not authorized to hold the policies unless specificallyapproved by the state bank commissioner if noliability exists under the deferred compensation plans;

      (v)   the cash surrender value of any life insurance policy purchased for thesole purpose of providing deferred compensation and benefit plans, underwrittenby any one life insurance company, cannot exceed at any time, 15% of the bank'scapital stock, surplus, undivided profits, loan loss reserve, capital notes anddebentures and reserve for contingency, unless the bank has obtained theprior approval of the state bankcommissioner; and

      (vi)   the cash surrender value of life insurance policies purchased for thesole purpose of providing deferred compensation and benefit plans, in theaggregate from all companies, cannot at any time exceed 25% of the bank'scapital stock, surplus, undivided profits, loan loss reserve, capital notes anddebentures and reserve for contingency, unless the bank has obtained the priorapproval of the state bank commissioner;

      (25)   subject to such rules and regulations as the state bank commissionermay adopt pursuant to K.S.A. 9-1713 and amendments thereto to promote safe andsound banking practices, to act as an agent and receive deposits, renew timedeposits, close loans, service loans, and receive payments on loans and otherobligations for any company which is a subsidiary, as defined in subsection (d)of K.S.A. 9-519 and amendments thereto of the bank holding company which ownsthe bank. Nothing in this subsection shall authorize a bank to conductactivities as an agent which the bank or the subsidiary would be prohibitedfrom conducting as a principal under any applicable federal or state law. Anybank which enters or terminates any agreement pursuant to this subsection shallwithin 30 days of the effective date of the agreement or termination providewritten notification to the commissioner which details all parties involved andservices to be performed or terminated;

      (26)   to make loans tothe bank's stockholders or the stockholders of the bank's controlling bankholding companyon thesecurity of the shares of the bank or shares of the bank's controlling bankholding company, with thelimitation that this may occur onlyif the bank would have extended credit to such stockholder on exactly the sameterms without the shares pledged as collateral;

      (27)   to make investments in and loans to community developmentcorporations(CDCs) and community development projects (CD projects) as defined in K.S.A.9-701 and amendments thereto, subject to the limitations prescribed by thecomptroller of the currency as interpreted by rules and regulations which shallbe adopted by the state bank commissioner as provided by K.S.A. 9-1713 andamendments thereto;

      (28)   to participate in a school savings deposit program authorized underK.S.A. 9-1138, and amendments thereto;

      (29)   with prior approval of the commissioner, to offer through one or morefinancial subsidiaries any products or services which a national bank may offerthrough its financial subsidiaries, subject to safety and soundnessrequirements imposed by the commissioner. As used in this paragraph, "financialsubsidiary" shall have the same meaning given to such term under theGramm-Leach Bliley act of 1999 (P.L. 106-102); and

      (30)   to purchase or hold an annuity for the sole purpose of funding anemployee deferred compensation and benefit plan subject to the limitationsprescribed by rules and regulations which shall be adopted by the state bankcommissioner as provided by K.S.A. 9-1713, and amendments thereto.

      History:   L. 1947, ch. 102, § 30;L. 1949, ch. 110, § 1;L. 1955, ch. 64, § 1;L. 1957, ch. 70, § 1;L. 1957, ch. 71, § 1;L. 1959, ch. 58, § 1;L. 1961, ch. 63, § 1;L. 1965, ch. 75, § 1;L. 1967, ch. 69, § 1;L. 1969, ch. 61, § 1;L. 1971, ch. 32, § 1;L. 1973, ch. 44, § 1;L. 1973, ch. 45, § 1;L. 1975, ch. 44, § 12;L. 1982, ch. 50, § 1;L. 1983, ch. 46, § 2;L. 1984, ch. 49, § 1;L. 1984, ch. 48, § 4;L. 1985, ch. 56, § 2;L. 1985, ch. 57, § 1;L. 1986, ch. 332, § 9;L. 1987, ch. 54, § 5;L. 1988, ch. 59, § 2;L. 1988, ch. 60, § 1;L. 1988, ch. 61, § 1;L. 1988, ch. 62, § 1;L. 1991, ch. 47, § 2;L. 1993, ch. 31, § 2;L. 1994, ch. 202, § 1;L. 1995, ch. 19, § 4;L. 1995, ch. 250, § 2;L. 1997, ch. 180, § 10;L. 2001, ch. 87, § 5;L. 2003, ch. 57, § 1;L. 2004, ch. 8, § 1; Apr. 8.